UK Inflation Rate Steady at 1.8%
Britain’s Consumer Price Index (CPI) – a key measurement of inflation – remained at 1.8 percent in July despite expectations that it would fall to 1.5 percent.
“With the amount of spare capacity in the economy still building, core price pressures should soon start to ease,” said Vicky Redwood, an economist at Capital Economics. “Indeed, these figures do little to alter our view that a prolonged period of low inflation or even deflation remains a serious risk,” she added. More
US Wholesale Price Fall More Than Expected
Wholesale prices in the US fell 0.9 percent in July bringing the total reduction for the past six months to 6.8 percent. This is the sharpest one-year drop in prices since records were first kept dating back more than sixty years. More
US Housing Starts Decline 1%
Housing starts in the US fell an unexpected 1 percent in July due to a sharp reduction in new multi-family dwellings; single-family starts actually rose slightly matching the highest level since October.
“It’s still an indication that we’re at a turning point,” Jonathan Basile, an economist at Credit Suisse Holdings Inc. in New York, said before the report. “The housing recovery will look uneven until there’s more visibility in the economy.” More
Economists Warn of Possible “Second Dip” in Recession
Despite countries including France, Germany, Hong Kong, and Japan posting positive growth last quarter bringing an end to the current recession, economists warn much of the growth is due to government spending and is not sustainable once governments cut back.
“The recovery is basically on the back of massive fiscal (government) stimulus,” noted economist Sal Guatieri of BMO Capital Markets. More
